Megaupload co-founder Kim Dotcom's bail application appeal has been rejected by a New Zealand judge.

Auckland's High Court concurred with an earlier ruling that stated the internet millionaire could flee the country if released, BBC News reports.

Dotcom, a German national, is being held on charges including internet piracy and racketeering. He was arrested along with fellow Megaupload executives Bram van der Kolk, Finn Batato and Mathias Ortmann earlier this month following the online storage locker's closure by the US authorities.

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The site's co-founder denies all allegations and has vowed to fight possible extradition to the US, according to Megaupload's legal representatives.

Lawyers representing the US authorities have alleged that a man with a history of creating counterfeit passports had a request to visit Dotcom in jail rejected. Dotcom hit out at the notion that he would flee New Zealand, claiming that he wishes to remain in the country with his pregnant wife.

"If people were to approach me and to offer such a service, I would tell them to go to hell," said Dotcom.

He went on to say that he has been contacted by a man claiming to be a prosecutor, offering him a favourable bail hearing in exchange for money, and received multiple pen pal requests from female inmates.